PROPOSED ADJUSTMENTS TO FY 2020 21 PRELIM OPERATING BUDGETS

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The various issues above are not expected to impact property values and anticipated revenues for FY 2020-21. However, home sales are down across the country amid growing financial uncertainty caused by the coronavirus. Existing home sales in March 2020 were down by more than 10 percent from the previous year. While fewer people are buying homes, there also are fewer people putting their homes on the market. The combination of reduced supply and demand means the coronavirus has not had much of an impact on property values yet. In Southern California and Ventura County, there's only been about a 3 percent change in home prices, as some sellers view the virus as more of a "temporary phenomenon" than a 2008 -level financial crisis, and are more likely to pull their homes off the market for a few months rather than make a price reduction. Home prices rising even as other economic measures decreased demonstrates that the county's rising home prices were driven by a lack of supply. After the short-term impacts of the virus wear off, trend will continue. Overall, economists do not expect the coronavirus to change a structural issue with the state and region's housing market: low supply. However, due to the impact of COVID on other agencies' tax revenue streams, CRPD is wary of the state's ability to borrow from local government, which has happened during other financial crises. Park Development Fees Park Development Fees (aka "Quimby") revenues continue to be sporadic due to limited residential building, although developers will provide Quimby Fees when the housing units are built. Beyond that Quimby fees are not expected to provide a consistent source of income for capital projects and/or infrastructure upgrades, putting pressure on the District's general fund to support capital replacement and improvement projects. General Fund The General Fund is the primary operating fund of the District. Costs associated with the day- to-day operations of the District are budgeted in this fund, as are repair projects under $5,000 and the purchase of capital items. General Fund Revenue (Exhibit A) Proposed adjustments include allocations from the SCE settlement funds proposed for Fiscal Year 2020-21 projects and anticipated decreases in revenues due to COVID-19 restrictions, mostly impacting the Recreation Revenue. To offset the loss of revenue and the changes in general fund expenditures identified below, staff is recommending a one time use of unassigned funds of approximately $650,000. General Fund Expenditures (Exhibit B) Proposed changes include adjustments to Salaries and Benefits based on the Memorandum of Understanding negotiated with the Service Employees International Union, effective July, 2019 through June, 2021, and changes in staff (promotions, transfers, new hires, terminations) primarily in the Recreation division. 3